The Weakest Link:
Spain in the Circuit of European Capital
An elder woman with a yard-long wooden spoon stirs a huge pan of paella bubbling over a ring of blue flame. Wine bottles pop, music pulses from the loudspeakers and the neighborhood gathers around long tables set up in the street. Today – May 18, 2013 – eleven families are celebrating their departure from the squatted building where they’ve spent the last eighteen months. The bank that owns it, Caixa Catalunya, has been forced into granting them five-year leases in other homes left empty by the crisis. This is a major victory for the Platform of People Affected by Foreclosures, known as the PAH (Plataforma de afectados por hipotecas). For the first time, they are rehousing people at a “social rent” of 150 euros per month. It’s a benchmark. The idea is to create new rights from the ground up, in defiance of rapacious economic practice and repressive legislation.
In a country with 27% unemployment, two million vacant housing units and a foreclosure rate of some five hundred per day, the PAH is a rising political force. According to recent national polls, an overwhelming majority finds it more competent to resolve the housing crisis than either of the two main parties, the conservative PP and the pseudo-socialist PSOE, whose ratings have fallen to historic lows. Here as in the rest of Southern Europe, the popping of the real-estate bubble led to a banking collapse, government bailouts, the specter of national insolvency, European rescues, a flood-tide of austerity measures and finally, a deep crisis of legitimacy affecting the entire political mainstream. How that all happened is a revealing bit of history. What happens next could change the course of the global capitalist system.
Two young Marxists from Madrid, Isidro López and Emmanuel Rodríguez, offer the most convincing account of recent Spanish economic history in their book Fin de Ciclo (End of Cycle). Under the Franco dictatorship, without unions or even a free work force, Fordist-type manufacturing never attained the dynamic expansionism of the postwar “economic wonder.” Coastal tourism plugged the gap, installing the construction industry as a major sector of the economy and prefiguring Spain’s future place in the European division of labor. After the 1970s transition to democracy, an initial housing bubble inflated in the 1980s and burst in the early 1990s. From 1995 onward it was followed by a tremendous influx of European capital, “hot money” at cheap interest rates afforded by membership in the single currency. Industry was all but abandoned and the country’s export deficit began to grow, finally reaching a staggering 10% in 2008. As part of the same contradictory process, Spain’s annual GDP growth surged above 4% (which is a little miracle for a developed Western European economy) and both political parties abased themselves in the rush to pass de-zoning laws and facilitate massive construction, driven ahead by the beachfront economy in Málaga and Marbella, the creative city model in Barcelona, or the financial wealth-effects that deluged over Madrid. Behind the mirage of the “knowledge based economy” were Northern tourists hungry for sex and sun, and structured finance traders pumping up the algorithms of earthly paradise.
During the peak years more housing units were built in Spain than in France, Germany and the UK combined. What you can see across the country is an ecological disaster. More territory was artificialized from 1986 to 2007 than had been from the Neolithic era to the mid-1980s. Employment broadened and salaries rose, while the state used tax revenues for an infrastructure splurge: highways, trains, airports, etc. Credit schemes reached deep into the population: fully 87% of households were the nominal “owners” of their dwelling before the bubble burst. Yet many of these new borrowers were precarious workers in the service and construction sectors. Their mortgages were bundled into collateralized debt obligations, just as in the US. However, Spanish finance does not enjoy all the imperial privileges: the riskiest and most profitable tranches were not palmed off on the global markets, but instead left to rot on the books of the semi-public provincial savings banks, or Cajas de Ahorro, which began their slow collapse amid the international credit crunch of 2008.
Bust follows boom, like clockwork. First came the bank failures, the government bailouts and the concentration of the credit sector, including the merger of seven Cajas into a mastodon called Bankia (nationalized one year after its foundation in 2011). After that came the dramatic upward climb of interest rates on government bonds as speculators started manoeuvering for a possible kill (ie, a Spanish exit from the Eurozone). On June 9, 2012, panicked Eurogroup negotiators forced the Partido Popular into a restructuring deal in exchange for a 100 billion-euro credit line. A month later, on July 26, the new European Central Bank head Mario Draghi announced that the ECB would purchase government bonds from member states in whatever quantity necessary. The speculators backed off, and at that point the crisis left the realm of finance and became thoroughly political.
Austerity is the code-name for a governmental operation that shifts the costs of financial breakdown onto national populations, with the aim of destroying redistribution programs and restructuring public institutions such as health care, education and retirement programs. It is carried out with the aim of restoring asset values in the eyes of international investors, chiefly by reducing wage levels and public deficits. In Spain, austerity has taken the form of multiple tax hikes, public-sector pay cuts and layoffs, stark reductions of services and the maintenance of a century-old mortgage law that leaves debtors bound to repayment even after repossession of the home by the bank. Despite widespread warnings of the downward spiral that such cuts will inevitably bring, the German political-economic elite and the Partido Popular have forged a kind of sadistic alliance in the demand for further austerity measures. On the Spanish side this punishing stance is exacerbated by neoconservative moralism, including harsh police repression of protesters and a recent abortion law pushing women back to coat-hanger days. Meanwhile, every effort is made to re-inflate the construction-finance complex, particularly now as tourism kicks up with the return of stock-market profits and wealth-effects in Northern Europe. This strategy is generally seen as a last-ditch effort to advance the corporate conservative agenda as far as possible during the PP’s remaining two years in power (the party’s radical decline in the polls making reelection almost inconceivable). The goal would be to leave the population hopeless, impoverished and exhausted, as seems to be the case in Greece. Yet the irrational severity of some measures suggests there might be an even more sinister aim: forcing a violent confrontation in order to impose an authoritarian solution.
The Spanish left is on its feet, presenting clear threats to neoconservative policies. The Indignado movement – more commonly known as 15-M, for its starting date on May 15 – was able to last the entire summer of 2011, before deciding on its own dissolution into neighborhood committees. The movement built on the mobilizing capacities inherited from the alterglobalization activism of the early 2000s, with its hacklabs, no-border camps and autonomous organizing of the precarious workforce. But now there was something new: a collapsing middle class that discovered the informational and organizational potentials of the Internet even as it lost much of what formerly defined its social status (financial assets, professional job security, high-end state entitlements). The occupied plazas and encampments saw the birth of a new political generation, which is a community of fate, debate and proposition, and not an age-category. The emergence of a vast embodied movement from that invisible labyrinth of rants, feelings, desires, snippets of information and philosophical discourse known as Web 2.0 brought the word and the reality of technopolitics to the forefront of the protest movement, along with the famous hashtag #spanishrevolution.
There were plenty of urgent questions to debate out in the streets two years ago, and there are even more today. Widespread proletarianization is still partially masked by family support networks and the usual reluctance of the middle classes to admit how close they are to the precarious, the unemployed and the excluded. And yet precarization and outright proletarianization is hitting millions of people, just as it is in the US. The explosive popularity of the PAH housing activists – including large numbers of Latin Americans and other immigrants who stand directly against the racism of the far right – is part of the aftermath of 15-M. So was the impressive encirclement of the Congress building in Madrid last September 25, an initially non-violent action which saw intense police repression as the government hysterically denounced an attempted coup by “anti-system” forces. More recently, large concentrations of citizens in support of public education and health-care services, known as mareas or “tides,” have begun appearing in urban centers. These protesters are not the usual suspects, but instead embrace a wide range of the population shocked by the naked corruption of the elites, and directly threatened by it as well. The likelihood of future mass uprisings? Under current conditions, they’re almost certain.
Since the encircling of the Congress, and in many cases, since 15-M, Spanish intellectuals on the left are talking openly about a double movement of destitution / constitution. Their aim is to topple the existing two-party system and transform the very fundaments of the democracy inherited from the 1970s. As the PP and the equally corrupt PSOE hit their nadir in the polls, a plethora of new splinter parties has arisen. The former communists – now called Izquierda Unida – are gaining broader popular support thanks to the straight-talking of Alberto Garzón, who at 27 is the youngest serving representative in the current Congress. If the cutbacks continue with their current ferocity, as everything currently indicates they will, then an electoral shift seems overwhelmingly likely, in which even a partial union of forces would bring a left coalition to power. The whole problem is knowing what to do with that power, and knowing how to keep it from becoming a mere simulacrum.
The failure of the left-wing Syriza party to form a government in Greece in 2012 made it clear that despite the punishments of austerity, a majority will chose to remain within Europe – while powerful outside forces will proclaim that any left opposition must necessarily lead to breakup. It’s true that the consequences of a Spanish exit from the Eurozone would sweep across the global capitalist system. Already weakened French and German banks together hold almost 50% of Spain’s foreign debt, which is far larger than that of Greece. It is widely believed that the collapse of the French and German banking sectors would bring on a full-fledged global depression. Yet nothing can prevent a determined political force in a country as large as Spain from refusing the EU austerity measures and forcing radically different negotiations. If framed and timed correctly, as Isidro López argues, this threat to the neoliberal status quo in Europe could win the adhesion of the other Southern member states, as well as France and Ireland. This is the paradox of the European Union today: only the threat of exit makes any kind of “voice” – that is, real political negotiation – even remotely possible. And only such a threat, at the EU level, can give substance to the strategy of destitution/constitution currently being explored at the national level in Spain.
“YO NO ENTRO EN TU LEY” reads the sign held by a PAH protester in Barcelona. “I don’t fit into your law.” By creating radical facts on the ground in the form of occupations, collectively negotiated social rents and massive tides of protest coordinated by sophisticated technopolitical networks, while simultaneously mobilizing both electoral forces and a guiding philosophy for the seizure and use of institutional power, the Spanish left is rediscovering the almost forgotten and seemingly archaic concept of autonomy. Autonomy is neither a right nor an essence nor even a persistent condition, but instead, the endless process whereby the collective self (autos) creates its own law (nomos). In this case it entails creating new social rights – ones that are based, not on social property as under the welfare state, but instead on a theorization of commons – as well as original forms of critical participation using technopolitical means to ensure that government is not hijacked by interest groups. For sure, this emergent process of autonomization is only made possible by the stark heteronomy of capital’s resurgent law of accumulation, which concentrates wealth among a few while imposing proletarianization on the many. In our time, political autonomy is a fruit that can only be plucked from a toxic desert. Yet these are the chances of human existence, singular and accidental, without any guarantees.
Obviously nothing concrete has yet been achieved. Obviously this is a desperate confrontation where the weaker side – our side – can easily lose. And just as obviously, the entire scenario described here could be annulled by the controlled drawdown of austerity, the stimulus of a few exclusive profit centers (bricks and mortar, again) and the stifling return to the status quo of a failed but immensely powerful system. Obviously we can all just stagger on like zombies greeting the everlasting dawn of the dead. But for anyone who wants out of the endless rerun of finance capitalism, the Spanish left – the weakest link in the circuit of European capital – is once again a radical force that deserves your active attention and your living support.